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Patients Profits Johnson and Johnson

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Patients Profits Johnson and Johnson
Patients versus Profits at Johnson & Johnson: Has the Company Lost its Way?: Knowledge@Wharton ( http://knowledge.wharton.upenn.edu/article.cfm?articleid=2943)

Patients versus Profits at Johnson & Johnson: Has the Company Lost its Way?
Published : February 15, 2012 in Knowledge@Wharton

For a corporate icon long held up as the gold standard in business ethics, Johnson & Johnson has suffered some stunning setbacks in recent years. Among the headaches: a seemingly endless string of product recalls, from Tylenol Arthritis Pain caplets to Benadryl to Rolaids; safety issues with the company's artificial hips, and lawsuits brought by numerous states over the marketing of its anti-psychotic medication Risperdal.

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And for a company that set the benchmark for crisis management in its response to the Tylenol tampering incident 30 years ago, J&J has looked sloppy and ineffective in its handling of these crises. While the company has not suffered a fatal hit to its brand, the stumbles have certainly tarnished its halo among consumers and created challenges for CEO William Weldon, who must convince consumers and investors alike that J&J's problems are behind it. The recent troubles are a major reversal of fortune for J&J. The company cemented its reputation for responsible management in 1982 when bottles of Tylenol were found to contain traces of cyanide, resulting in seven deaths. Then-CEO James Burke recalled millions of bottles of Tylenol and replaced them with new tamper-proof packaging. Burke's handling of the crisis put J&J's credo -- outlined in a mission statement that clearly says patients come before profits -- front and center. That credo, says Wharton professor of legal studies and business ethics Thomas Donaldson, is "in J&J's blood.... There is a real

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